Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment he has made of the impact of rising (a) inflation and (b) refinancing costs on the cost of servicing Government debt.

Inflation has a range of impacts on the public finances and previous OBR forecasts have shown how inflation can increase spending on welfare and debt interest, as well as tax revenues. With respect to debt interest, the most recent OBR forecast in March projected that government spending on debt interest would reach £83.0 billion in 2022-23. The OBR also publish a ‘ready reckoner’ to estimate the effect of changes in economic determinants, such as inflation and gilt rates. This shows the estimated change in debt interest costs from a 1 percentage point increase in inflation and gilt rates throughout the forecast.